A 220-mph NEC? A contrarian weighs in

In competitive markets, vision and strategy are tested daily as consumers vote with their wallets, investors choose among opportunities, and competitors react—all creating greater efficiency.

Conventional wisdom in passenger rail today is high speed trains. Amtrak, for example, has a 30-year, $117 billion (or more) plan to convert the 456-mile Northeast Corridor, linking Washington D.C., Baltimore, Philadelphia, New York, and Boston, to a 220-mph speedway providing 96-minute trips between Washington and New York and 84-minute trips between New York and Boston. That equates to more than $250 million per mile, which, on the Washington D.C.-New York segment, would shave some 69 minutes from the current Acela Express trip that travels between 110 mph and 150 mph over 65% of the route and about 85 mph on average for the trip.

But as a contrarian points out, the infrastructure improvement costs of upping maximum Northeast Corridor speeds to 220 mph is equivalent to almost $1 billion per minute saved, and when one arrives a half-hour earlier at origin to await boarding, and then stands in a cab line at destination for 10 minutes, much of the train-time savings value evaporates. On intermediate trips, the time savings of 220-mph speeds is obviously less. The more stops, the more time at stations, plus time lost decelerating and accelerating.

For sure, today’s slower speeds—85 mph average for the Acela between Washington D.C. and New York, and slower for conventional trains—are not discouraging Amtrak riders. Over the Washington, D.C.-New York segment of the Northeast Corridor, Amtrak has captured almost 70% of the air/rail market share; and 52% of the air/rail market share on the much slower New York-Boston route. Airport tarmac delays and highway congestion are not anticipated to ease, which is a significant reason travelers are switching to trains along the Northeast Corridor. Thus, speed and time are relative to competing modes.

What most intrigues the contrarian are the demographics of future Amtrak passengers. Already, the advent and improvement of video conferencing is reducing business travel, and the time value of business travelers is greatest among all travelers. Furthermore, as the contrarian observes, today’s teenagers and 20-somethings—who will be the business riders of the future—are so wedded to modern electronics, whose applications surely will improve in future years, that face-to-face meetings will be of far less importance to them than today’s business travelers. “Younger Americans put greater trust in all on-line activities than their parents,” says the contrarian.

Indeed, when the Association of American Railroads and its Class I members became a pioneer in video conferencing some 25 years ago, one of the first to ask for a demonstration were officials of United Airlines, who expressed apprehension as to video conferencing’s impact on future business travel.

“Airline and passenger train riders of the future may well be primarily those traveling on vacation and for recreation, where the speed of travel will be less important,” says the contrarian. Even today’s business travelers are showing more interest in passenger productivity, comfort, and convenience, rather than speed of travel—meaning reliable Wi-Fi, video screens streaming C-SPAN, CNN, and entertainment, and adequate desk space allowing business travelers to be in their virtual office throughout the trip. The virtual office is increasing productivity at home and during travel time. As United Airlines recognized, the ability to stay productive via electronic means may be a big threat to future business travel.

As the now-retired supersonic Concorde proved, business executives place a limit on the value of speed.

“More urgent than increasing Northeast Corridor train speed,” says the contrarian, “is the necessity to bring Northeast Corridor trains closer to airline terminals,” such as Baltimore, where a scheduled stop for the airport requires a lengthy wait for a connecting bus. In Philadelphia, a connecting commuter train or taxi is required to reach downtown.

”Much of the attraction for Amtrak travelers to Boston, New York, and Washington D.C. is that Amtrak’s stations are within the city and close to business and recreational destinations,” says the contrarian. “By contrast, airline trips to Boston and New York—even if not delayed on the tarmac—require lengthy and expensive cab rides on congested roadways between the airport and center city, making Amtrak a preferred mode.”

The contrarian’s major objection to Amtrak’s vision of 220-mph trains is the whopping $256 million-per-mile cost of reengineering and retracking the Northeast Corridor. With its $117 billion total price tag, and Amtrak struggling to wrest from Congress even $1 billion annually for its current operating subsidy, the prospect of such a huge new federal investment is most problematic. While Amtrak envisions Northeast Corridor states to chip in, none is in high-financial cotton. Indeed, a vision of high speed rail passenger travel in California is fast collapsing for a variety of reasons, including projected cost.

The contrarian also notes that the Northeast is growing in population more slowly than other regions of the nation, and is losing congressional seats, which means fewer votes in favor of federal funding for the Northeast Corridor.

The contrarian thus suggests placing Northeast Corridor infrastructure repairs and renewal and expansion of Acela Express and conventional trains ahead of reengineering the corridor for 220-mph service. The contrarian lists removing choke points on the century-old twin-bore Hudson River tunnels linking New Jersey and New York, and the 19th century Baltimore & Potomac tunnel under the City of Baltimore, among the most urgent. Also cited as priority projects are 1,400 Amtrak-owned bridges requiring maintenance and, in many cases, renewal.

Then there is the eight-decades-old and decaying variable-tension catenary between Washington D.C. and New York, and the urgency of eliminating beverage spilling and finger-jarring (think electronic tablets and smart phones) bumps and jolts along the route. The previous major track rehabilitation between Washington D.C. and New York was undertaken in the 1980s. Also, Amtrak bears the cost of upkeep and improvements to the stations it owns.

For sure, the list of Northeast Corridor infrastructure repairs and renewal requiring investment—simply to sustain current speeds and meet growing passenger demand—is long and costly, and current federal and state budgets fall short of providing the needed dollars. “Federal and state investment of $256 million per mile to reengineer the Northeast Corridor cannot be expected in the near or intermediate future,” says the contrarian.

Outside the Northeast Corridor, Amtrak faces infrastructure upgrade costs even though its long-distance trains are hosted over freight-railroad-owned track. In Kansas, Colorado, and New Mexico, for example, $100 million is needed for BNSF track upgrades west from Newton, Kans., to Albuquerque, N.M., on the route of the Southwest Chief between Chicago and Los Angeles.

BNSF says it will not fund track upgrades beyond what is required for 30-mph freight trains, and that Amtrak will have to pay for incremental improvements required to keep the Southwest Chief on that route. Amtrak says it can’t sustain slowdowns from 79 mph to 30 mph west from Newton to Albuquerque. Diversion of the train south through Oklahoma and Texas and west to Albuquerque has been suggested (which would end service to Garden City, Kans., Lamar and La Junta, Colo., and Lamy, N.M.), but that might not be feasible as the Passenger Rail Investment & Improvement Act (PRIIA) of 2008 locked in long-distance routes. And Kansas, Colorado, and New Mexico officials say their states cannot afford to participate in a $100 million upgrade.

The contrarian suggests Amtrak scrap its $117 billion, 220-mph vision for the Northeast Corridor and redirect scarce dollars to eliminating corridor deferred maintenance, expanding its car and locomotive fleet to accommodate growing passenger demand, and rehabilitate and improve track and signaling for long-distance trains—such as in western Kansas.

The contrarian compares the $256 million-per-mile cost of reengineering the Northeast Corridor for 220-mph service with the far lower cost of upgrading to 110 mph in Kansas or elsewhere.

For example, the investment to upgrade 104 miles of Amtrak-owned track between Harrisburg, Pa., and Philadelphia to a maximum 110-mph speed was just $1.3 million per mile, while a nearly completed 284-mile upgrade of freight rail track to maximum 110-mph service between Chicago and St. Louis is but $4.5 million per mile, using previously appropriated federal and state funds and a Union Pacific contribution. (It should be noted, however, that that route is relatively straight and flat, traverses mostly rural areas, has no major bridges or tunnels, and has low freight volume. But engineering studies suggest only $10 million per mile would be needed over most routes to bring maximum passenger train speeds to 110 mph.)

The siren song of high speed rail across America—and especially for many high-population-density corridors—is compelling, but public transportation dollars are scarcer than anytime in modern history, and anti-tax, lower-public-budget forces represent a growing political vigor, notwithstanding public opinion polls that favor more and faster passenger trains.

Where the twain shall meet is unknown, but dollars trump desires, and the contrarian’s practical approach is first to eliminate deferred maintenance, remove choke points, increase passenger capacity, and make trains more rider friendly for business, recreational, and vacation travelers before reaching for 220-mph service whose value to future generations may be far less than envisioned today.

The contrarian’s ideas, vision, and strategy are deserving of scrutiny alongside Amtrak’s 30-year vision of 220-mph trains on the Northeast Corridor, and deserve consideration by planners and those who will be called upon to make the investment.

(Frank N. Wilner is author of Amtrak: Past, Present, Future, available at www.translert.com. The contrarian cited is a former federal rail official who requests anonymity.)